NU Online News Service, Jan. 14, 2004, 12:05 p.m. EST – Only 4 life insurance companies failed in 2003, according to Weiss Ratings Inc., Jupiter, Fla.[@@]
That’s up from 3 in 2002, but, in general, “you can see bankruptcies in the life industry are trending downward since the late 1990s,” says Tim Schierer, a Weiss analyst.
Schierer points out that of the 4 2003 bankruptcies, 3 were the result of the failure of a single holding company that ran into severe financial trouble.
The 3 companies were Western United Life Assurance Company, Seattle, which filed for bankruptcy with total assets of $1.6 billion; Old Standard Life Insurance Company, Boise, Idaho, with assets of $425.3 million; and West Annuity & Life Insurance Company, Phoenix, with assets of $224.4 million.
The companies were units of National Summit Corp., a holding company with headquarters in Post Falls, Idaho, and Spokane, Wash.
The fourth failed life insurance company was Good Samaritan Life Insurance Company, Richardson, Texas, an entity which seems to have had a number of different incarnations over the past 9 years before finally evaporating last year with undetermined assets. Previous names for Good Samaritan include East Funeral Benefit Insurance Company, Assured Security Group, Maximum Corp. and Beneficial Family Reserve Group, Schierer says.
In addition, 3 health maintenance organizations went bankrupt, down from 6 in 2002.
Weiss credits premium increases, cost-cutting programs and national economic growth for helping hold down the number of HMO bankruptcies last year.